Karachi: The Results of latest draw of P.B. Rs. 200 has been announced in Hyderabad this morning. According to the details, PB # 055127 has won the 1st Prize of Rs. 750,000 , 2nd Prize of Rs. 250,000 is won by to PB# 889419, PB# 668785, PB# 523394, PB# 246922, and PB# 914331.

Complete results of other prizes will be available very soon. You can check your prize bond draw on Finance.Kalpoint.Com or by simply clicking this link :"Check your Prize Bond Draw Result", on this blog. By clicking on the link you will land on a webpage that will ask you to select the prizebond denomination (which is Rs.200 for this draw), and enter your email address. Its simple as that...!

Finance.Kalpoint.com, has long been enjoying the privilege of making the prize bond draws available for its users online within 4 hours of the draw, so stay tune, the complete results of the draw will be available here within a few hours !!

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Monday, June 15, 2009


Asian stocks declined as the three- month, 47 percent rally in the MSCI Asia Pacific Index raised investor concerns that equities are too expensive relative to earnings prospects.

Sumitomo Mitsui Financial Group Inc., Japan’s second- biggest bank by value, sank 6.4 percent on speculation a share sale will dilute existing holdings. Fortescue Metals Group Ltd., Australia’s No. 3 iron ore exporter, slumped 7 percent as Metal Bulletin reported prices for the raw material fell last week. Malaysian Airline System Bhd. fell 3.7 percent after posting a quarterly loss.

“We’re still in the midst of the worst global recession in the post-war period,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which manages about $95 billion. “It’s inevitable that aftershocks will keep coming through.”

The MSCI Asia Pacific Index lost 1.2 percent to 103.88 as of 1:27 p.m. in Tokyo, after ending last week at its highest level since Oct. 2. Japan’s Nikkei 225 Stock Average fell 0.7 percent, while Hong Kong’s Hang Seng Index declined 1.5 percent. Taiwan’s Taiex Index slumped 3.7 percent, the most in Asia today.

Singapore’s Straits Times Index sank 1.6 percent after the government reported the city’s employers had fired more workers last quarter than initially estimated. Australia’s OZ Minerals Ltd., an Australian mining company, fell 4.3 percent as Citigroup Inc. downgraded the stock.

Among shares that rose today, Shenzhen Development Bank Co. jumped 6.7 percent after Ping An Insurance (Group) Co. said it plans to buy a stake. Goodman Group, Australia’s biggest industrial real estate investment trust, surged 10 percent after the Australian Financial Review reported China Investment Corp. will take a stake in the company.

‘Signs of Stabilization’

Futures on the Standard & Poor’s 500 Index fell 0.5 percent. The gauge advanced 0.1 percent to a seven-month high on June 12, as Bank of America Corp. rallied on higher profit estimates and investors bought shares of utilities and phone companies. Treasuries rose for a third day today.

MSCI’s Asian gauge has gained 47 percent from a more than five-year low on March 9 amid speculation the global economy is recovering. The Group of Eight finance ministers said after a meeting in Italy at the weekend that they have started pondering how to reverse the emergency steps they took to rescue the global economy as there are “signs of stabilization.”

The three-month stock rally drove the average valuation of companies on MSCI’s Asia Pacific gauge to 1.5 times the book value of assets at the end of last week. That’s the highest since Sept. 26.

Stock Sale

“The rally in the past few months seems to have come too fast,” said Marco Mak, head of research at Tai Fook Securities Ltd. in Hong Kong. “Some companies may also move to raise some cash from the market, and that could also contribute to the consolidation phase.”

Sumitomo Mitsui fell 6.4 percent to 4,070 yen after the Nikkei reported the company may raise more than expected from a previously announced share sale. Kyosuke Hattori, a spokesman for the bank, said the company hadn’t changed the maximum amount of stock it planned to sell.

Asciano Group, an owner of ports and container terminals in Australia, announced plans today to sell at least A$2 billion ($1.6 billion) in shares to repay debt. The stock, which has tripled in the past three months, was halted in Sydney today.

Fortescue slumped 7 percent to A$3.86. Cash prices for iron ore into China, the world’s biggest buyer, dropped 2 percent from a four-month high in the week ended June 12, according to Metal Bulletin prices.

Best Performers

Materials and energy stocks fell today on declines in metal and oil prices. The two groups are the best-performing of the MSCI Asia Pacific Index’s 10 industries in the past month as investors bet demand for raw materials will pick up as the global economy recovers.

BHP Billiton Ltd., the world’s largest mining company and Australia’s biggest oil producer, lost 2.1 percent to A$37.26. Rio Tinto Group, the world’s third-biggest mining company, fell 1.5 percent to A$76.07. Cnooc Ltd., China’s largest offshore oil producer, sank 3.3 percent to HK$10.48 in Hong Kong.

Gold futures dropped 2.2 percent in New York on June 12, while copper slid 2.9 percent. Oil fell 1.1 percent in after- hours trading, adding to the previous trading day’s 0.9 percent decline.

OZ Minerals declined 4.3 percent to A$1 as Citigroup Inc. cut the company’s stock rating to “sell” from “hold,” citing risks associated with the startup of a mine.

National Carrier

Utility stocks, the worst performers in this year’s global rally, was one of only two groups that rose today on the MSCI Asia Pacific Index. Utilities trade at the cheapest levels relative to the MSCI World Index since 2004 after falling 8.6 percent in 2009, according to Bloomberg data.

Malaysian Airline, the country’s national carrier, dipped 3.7 percent to 3.14 ringgit after reporting its first quarterly loss in more than two years on lower passenger traffic and wrong-way bets on the price of fuel. The stock was downgraded to “underperform” from “neutral,” Credit Suisse Group AG said in a report today.

Shenzhen Development Bank gained 6.7 percent to 21.33 yuan after Ping An agreed to pay $3.2 billion for a controlling stake. Ping An, China’s second-largest insurer, gained 0.1 percent to 45.15 yuan following a five-day trading halt.

Goodman Group surged 10 percent to 49.5 Australian cents. The company may announce China Investment Corp. will take a A$500 million ($404 million) stake, the Australian Financial Review reported, without saying where the information came from.


(Bloomberg)

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Monday June 15, 2009


ISLAMABAD: The government has increased the rate of capital value tax (CVT) from 2 to 4 percent on transfer of immoveable property; withholding tax on imports raised from 2 to 4 percent; 16 percent Federal Excise Duty (FED) in Value Added Tax (VAT) mode on services provided by fund/non-fund services provided by banking and non-banking financial companies, insurance services, ports/terminal operators, stock brokers and 16 percent FED on advertisements in newspapers, periodicals, hoarding boards, pole signs and shop boards.

Finance Bill 2009-10 released by the Federal Board of Revenue (FBR) on Saturday reveals taxation measures to meet the revenue collection target of around Rs 1.375 trillion for 2009-10. To meet this target, the FBR has envisaged collecting Rs 565 billion in shape of direct taxes, Rs 492 billion as sales tax, Rs 165 billion as FED and Rs 160 billion as customs duty in 2009-10.

Some major changes in tax laws show that the Presumptive Tax Regime (PTR) has been abolished on imports, exports and services. They would be liable to file returns and pay minimum tax.

Through another measure, the scope of advance tax collection on purchase of new locally manufactured motorcar/jeep is proposed to be extended to all types of motor vehicles. The basic limit of exemption from income tax in respect of salaried persons is proposed to be increased from Rs 180,000 to Rs 200,000. In the case of women salaried taxpayers, this limit is proposed to be increased from Rs 240,000 to Rs 260,000.

Presently, tax collected on monthly electricity bills in respect of non-corporate commercial and industrial consumers is treated as final tax. The tax deducted on the monthly electricity bills exceeding Rs 30,000 will be adjustable which consequently could be refunded.

The Seventh Schedule to the Income Tax Ordinance has been amended to restore the facility for banks to claim deduction on account of provisions of non-performing loans. However, the same is proposed to be restricted to 1 percent of the total advances made by the bank in a tax year. The government has also restored an important provision regarding payment of minimum tax on declared turnover by the companies showing losses.

The motor vehicle registration authorities are being empowered to collect advance tax payable on purchase of a new locally manufactured motor vehicle at the time of registration of such vehicle. It is being made mandatory that the taxpayers who are required to file wealth statement shall also file wealth statement reconciliation giving necessary details and documents in support thereof.


(BRecorder)

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Monday, June 15, 2009


KARACHI: Borrowing by output-oriented private sector, which amounted to as much as Rs 384 billion during the first 11 months of FY08, plummeted to under Rs 14 billion during FY09 to May 30, showing a gap of about Rs 370 billion in credit utilisation over the corresponding period of last year.

The incremental growth of private sector credit in FY08 over FY07 had worked out to well over 15 percent, whereas the growth in FY09 over FY08 worked out to less than even 0.5 percent.

The figure did not look adequate enough even to meet the financial requirements of the least sophisticated agriculture sector, what to talk of other more capital-hungry sectors The abnormally low off-take of credit by the private sector during FY09 so far naturally translates into a (yet to be finalised) 2 percent economic growth for the year--the lowest in the last three decades.

The other segment of the corporate sector, namely the public sector enterprises or PSEs, however, utilised abnormally large chunk of credit, amounting to some Rs 145 billion during FY09 to May 30 as against less than Rs 61 billion in the corresponding period of FY08 and much less than this in previous years.

Detailed data available up to March 2009 showed that even bulk of the total was utilised by minor PSEs as against the autonomous five production and services giants. Who knows whether they borrowed this huge amount to meet their production needs or non-developmental spending.

Among other developments, as in the previous few weeks, surge in government borrowing for commodity operations continued through the week ended on May 30, 2009 with wheat procurement continuing in full swing from a bumper crop. Borrowing for the purpose rose from Rs 178 billion at the end of previous week to over Rs 191 billion at the end of current week, showing an increase of Rs 13 billion over the week. In a previous review, we had explained in detail the factors leading to the present surge.

In the meanwhile, government borrowing for budgetary support declined by Rs 24 billion to about Rs 321 billion during the week while in the previous week such borrowing had increased by Rs 13 billion. At its present level, budgetary borrowing from the State Bank amounted to Rs 159 billion (showing a decline Rs 39.5 billion over the previous week), while borrowing from the scheduled banks amounted to Rs 162.5 billion (showing an increase of about Rs 15.5 billion over the previous week).

Last year, in the corresponding period, the government had borrowed Rs 364.5 billion for budgetary support and that too entirely borrowed from the central bank while the scheduled banks actually happened to have retired some Rs 198 billion.

The secret of declining government borrowing from the banking system (the central bank plus the scheduled banks) this year lay in the massive recourse to borrowing from the non-bank sector through NSS which is reported to be contributing about Rs 2 billion daily to the government kitty.

It is estimated that government borrowing from this source could reach to Rs 250 billion in FY09 compared with an average of Rs 54 billion during the preceding three years. Though borrowing from the non-bank sector is considered to be the least inflationary, compared with borrowing from the central bank (highly inflationary) and scheduled banks (less inflationary than the central bank), it carries a heavier debt service burden because of very high returns offered on NSS paper.

Besides above developments on the monetary scene, OINs of the banking system contributed to a net contraction of some Rs 47 billion in money supply during the week while NFA of the banking system contributed to a net expansion of Rs 21.5 billion in it.

All said, incremental money supply during the week increased by Rs 47.6 billion to Rs 303.8 billion or 6.48 percent and consisted of about Rs 190 billion in terms of currency in circulation and over Rs 113 billion in deposit money besides other deposits with the State Bank which are of the nature of money.


(BRecorder)

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KARACHI: The rupee, despite being under pressure due to heavy payments by importers, somehow managed to reduce losses against dollar during the week ended on June 13, 2009. On the interbank market, the rupee lost 30 paisa against dollar for buying and selling at 81.05 and 81.10.

On the open market, the rupee followed same trend, shedding 10 paisa versus dollar for buying and selling at 81.00 and 81.20, and losing 50 paisa in relation to euro for buying and selling at Rs 113.00 and Rs 114.00. High demand for dollars made the rupee unable to keep its level firm versus both the US and European currencies. It looked that the rupee would not retain its firmness in the near future due to importers' hectic buying to clear payments yet it may resist sharp losses. According to State Bank of Pakistan (SBP) weekly data, foreign exchange reserves were down by 9.8 million dollars to 11.5 billion dollars.

INTERBANK MARKET RATE: On Monday, the rupee, despite being under pressure due to heavy payments before the end of the outgoing fiscal year, gained five paisa against dollar for buying and selling at 80.75 and 80.80. On Tuesday, strong demand for dollars pushed the rupee down which lost 25 paisa for buying and selling at 81.00 and 81.05.

On Wednesday, the rupee drifted lower by 5 paisa in terms of dollar for buying and selling at 81.05 and 81.10. On Thursday, the rupee managed to gain 25 paisa against dollar for buying and selling at 80.80 and 80.85. On Friday, the rupee dropped sharply by 20 paisa versus dollar for buying at 81.00 and 17 paisa for selling at 81.02. On Saturday, the rupee shed five paisa versus dollar for buying at 81.05 and 8 paisa for selling at 81.10.

OVERSEAS OUTLOOK FOR DOLLARS: In the first Asian trade, the dollar rose against a basket of currencies extending sharp gains made late last week as US Treasury yields rose to seven month highs, prompting investors to cover short-dollar positions.

Smaller-than-expected job losses in the United States in May sparked concerns on Friday that the Federal Reserve may lift interest rates sooner than previously thought, helping push up Treasury yields. In the second Asian trade, the dollar rose against a basket of currencies but stayed below a two-week high scaled after US jobs data last week stoked expectations for a Federal Reserve rate rise later this year.

The euro dipped but stayed above lows hit on Monday, when ratings agency Standard & Poor's cut Ireland's sovereign credit rating to AA, its second downgrade in three months.

Amid third Asian trade, the dollar was steady against a basket of currencies after sliding the previous day when investors questioned whether the economy had improved enough to justify talk of a Federal Reserve rate hike by the year-end. The dollar rose against the yen as traders cited regional players actively covering short positions with Asian shares extending gains in early trade.

In the fourth session of the Asian trade, the dollar fell against a basket of currencies, paring some gains made after the benchmark US Treasury yield hit its highest point in eight months the previous day.

In the fifth session of the Asian trade, the dollar was steady against other major currencies after falling the previous day when improved US labour market and retail sales figures boosted optimism about the economy, eroding the dollar's allure as a safe haven.

At the week-end, the US dollar rose broadly in New York, rebounding from a sell-off earlier this week, while demand for the euro fell after data showed a plunge in euro zone industrial production. The US dollar is likely to extend this week's drop in the trading week ahead as economic data fails to convince investors the US economy is recovering fast enough to warrant demand for the greenback. Despite a rally on Friday, this week's record auction of $65 billion of Treasury debt and burgeoning fears of inflation are also prompting investor caution on the dollar as they feel they are in uncharted waters regarding US fiscal policy.

Rhetoric about finding a new global reserve currency to challenge the greenback is another slight weight on the dollar before a meeting in Russia of BRIC nations Brazil, Russia, India and China.

OPEN MARKET RATES: On June 8, the rupee shed 10 paisa in terms of dollar for buying at 80.90 while it did not show any change for selling at 81.10. The rupee managed to hold the weekend levels versus euro for buying and selling at Rs 112.50 and 113.50.

On June 9, the rupee managed to hold its overnight levels against dollar for buying and selling at 80.90 and 81.10. The rupee managed to gain Re one in relation to euro for buying and selling at Rs 111.50 and 112.50. On June 10, the rupee shed 5 paisa against dollar for buying and selling at 80.95 and 81.15. The rupee shed Rs 1.60 versus euro to Rs 113.10 and Rs 114.10.

On June 11, the rupee inched up 5 paisa in relation to dollar for buying and selling at 80.90 and 81.10. The rupee adopted the same pattern versus the euro, gaining 60 paisa for buying and selling at Rs 112.50 and Rs 113.50.

On June 12, the rupee shed 5 paisa for buying against dollar for buying at 80.95 while it did not show any change for selling at the overnight level at 81.10. The rupee, however, lost 50 paisa for buying at Rs 113.00 and 114.00. On June 13, the rupee was down by 5 paisa against dollar for buying 81.00 and 10 paisa for selling at 81.20. The rupee rose 30 paisa in relation to the euro for buying and selling at Rs 113.00 and Rs 114.00.


(BRecorder)

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KARACHI: The rupee, despite being under pressure due to heavy payments by importers, somehow managed to reduce losses against dollar during the week ended on June 13, 2009. On the interbank market, the rupee lost 30 paisa against dollar for buying and selling at 81.05 and 81.10.

On the open market, the rupee followed same trend, shedding 10 paisa versus dollar for buying and selling at 81.00 and 81.20, and losing 50 paisa in relation to euro for buying and selling at Rs 113.00 and Rs 114.00. High demand for dollars made the rupee unable to keep its level firm versus both the US and European currencies. It looked that the rupee would not retain its firmness in the near future due to importers' hectic buying to clear payments yet it may resist sharp losses. According to State Bank of Pakistan (SBP) weekly data, foreign exchange reserves were down by 9.8 million dollars to 11.5 billion dollars.

INTERBANK MARKET RATE: On Monday, the rupee, despite being under pressure due to heavy payments before the end of the outgoing fiscal year, gained five paisa against dollar for buying and selling at 80.75 and 80.80. On Tuesday, strong demand for dollars pushed the rupee down which lost 25 paisa for buying and selling at 81.00 and 81.05.

On Wednesday, the rupee drifted lower by 5 paisa in terms of dollar for buying and selling at 81.05 and 81.10. On Thursday, the rupee managed to gain 25 paisa against dollar for buying and selling at 80.80 and 80.85. On Friday, the rupee dropped sharply by 20 paisa versus dollar for buying at 81.00 and 17 paisa for selling at 81.02. On Saturday, the rupee shed five paisa versus dollar for buying at 81.05 and 8 paisa for selling at 81.10.

OVERSEAS OUTLOOK FOR DOLLARS: In the first Asian trade, the dollar rose against a basket of currencies extending sharp gains made late last week as US Treasury yields rose to seven month highs, prompting investors to cover short-dollar positions.

Smaller-than-expected job losses in the United States in May sparked concerns on Friday that the Federal Reserve may lift interest rates sooner than previously thought, helping push up Treasury yields. In the second Asian trade, the dollar rose against a basket of currencies but stayed below a two-week high scaled after US jobs data last week stoked expectations for a Federal Reserve rate rise later this year.

The euro dipped but stayed above lows hit on Monday, when ratings agency Standard & Poor's cut Ireland's sovereign credit rating to AA, its second downgrade in three months.

Amid third Asian trade, the dollar was steady against a basket of currencies after sliding the previous day when investors questioned whether the economy had improved enough to justify talk of a Federal Reserve rate hike by the year-end. The dollar rose against the yen as traders cited regional players actively covering short positions with Asian shares extending gains in early trade.

In the fourth session of the Asian trade, the dollar fell against a basket of currencies, paring some gains made after the benchmark US Treasury yield hit its highest point in eight months the previous day.

In the fifth session of the Asian trade, the dollar was steady against other major currencies after falling the previous day when improved US labour market and retail sales figures boosted optimism about the economy, eroding the dollar's allure as a safe haven.

At the week-end, the US dollar rose broadly in New York, rebounding from a sell-off earlier this week, while demand for the euro fell after data showed a plunge in euro zone industrial production. The US dollar is likely to extend this week's drop in the trading week ahead as economic data fails to convince investors the US economy is recovering fast enough to warrant demand for the greenback. Despite a rally on Friday, this week's record auction of $65 billion of Treasury debt and burgeoning fears of inflation are also prompting investor caution on the dollar as they feel they are in uncharted waters regarding US fiscal policy.

Rhetoric about finding a new global reserve currency to challenge the greenback is another slight weight on the dollar before a meeting in Russia of BRIC nations Brazil, Russia, India and China.

OPEN MARKET RATES: On June 8, the rupee shed 10 paisa in terms of dollar for buying at 80.90 while it did not show any change for selling at 81.10. The rupee managed to hold the weekend levels versus euro for buying and selling at Rs 112.50 and 113.50.

On June 9, the rupee managed to hold its overnight levels against dollar for buying and selling at 80.90 and 81.10. The rupee managed to gain Re one in relation to euro for buying and selling at Rs 111.50 and 112.50. On June 10, the rupee shed 5 paisa against dollar for buying and selling at 80.95 and 81.15. The rupee shed Rs 1.60 versus euro to Rs 113.10 and Rs 114.10.

On June 11, the rupee inched up 5 paisa in relation to dollar for buying and selling at 80.90 and 81.10. The rupee adopted the same pattern versus the euro, gaining 60 paisa for buying and selling at Rs 112.50 and Rs 113.50.

On June 12, the rupee shed 5 paisa for buying against dollar for buying at 80.95 while it did not show any change for selling at the overnight level at 81.10. The rupee, however, lost 50 paisa for buying at Rs 113.00 and 114.00. On June 13, the rupee was down by 5 paisa against dollar for buying 81.00 and 10 paisa for selling at 81.20. The rupee rose 30 paisa in relation to the euro for buying and selling at Rs 113.00 and Rs 114.00.


(BRecorder)

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Monday, June 15, 2009


KARACHI : The Sindh government has allocated Rs 1,233 million for the development of industrial sector under the Annual Development Programme (ADP) in the fiscal year 2009-10. The funds earmarked for the industrial development have been increased by Rs 104 million as compared to the last year's allocation of Rs 1,129 million for some 16 new and ongoing schemes, official sources told Business Recorder.

Of these schemes, development work on ten projects is under way, while only six new schemes have been included in the next year's ADP, they added. The sources said Rs 73.884 million has been earmarked for the ongoing schemes of the Sindh Small Industries Corporation, and Rs 150 million for new projects.

Break-up of the allocations is as follows: Rs 34.457 million for extension of Small Industrial Estate, Hyderabad, Rs 11.854 million for establishment of Small Industrial Estate in Ghotki district, Rs 5.639 million for setting up of Small Industrial Estate in Mithi, district Tharparkar. While Rs 21.934 million has been earmarked for the up-gradation of nine Small Industrial Estates in districts Thatta, Sanghar, Dadu, Hala, Badin, Nawabshah, Rohri, Sehwan Sharif, and Mirpurkhas.

The new schemes include extension of Small Industrial Estate in Larkana district with an allocation of Rs 50 million, and Small Industrial Estate Power Looms, Hyderabad with an amount of Rs 100 million. The SITE Ltd will give Rs 100 million as its share.

Rs 29.053 million has been earmarked for the improvement of infrastructural facilities in five estates - SITE Limited in Karachi, Nooriabad, Kotri, Hyderabad and Sukkur. Rs 100 million has been allocated for the development of infrastructure at SITE Benazirabad (Nawabshah).

Rs 100 million for laying of water supply line from Keenjhar Lake, Thatta to SITE Nooriabad. The scheme is being undertaken on 50:50 basis between the provincial government and SITE Ltd. Rs 70 million for the construction of 5.0MGD filter plant at SITE Hyderabad on 50:50 basis between the Sindh government and SITE Ltd. The new scheme includes consultancy service for combined effluent treatment plants in Karachi with an allocation of Rs 20 million.

Rs 100 million has been allocated for water connection to industrial and economic zone at Dhabeji and adjoining areas under public-private partnership. Rs 400 million has been earmarked for establishment of development and management companies for SITE Karachi, Nooriabad, Kotri and SITE Sukkur. Rs 3.557 million has been allocated for the improvement of the office of the deputy director industries and residential accommodation in Hyderabad district, and Rs 14.273 million for up-gradation of Sindh Government Press in district Khairpur.


(BRecorder)

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Monday, June 15, 2009

Foreign direct investment in China fell for an eighth month from a year earlier as companies cut spending to weather the worst economic slump since the Great Depression.

Investment slid 17.8 percent in May to $6.38 billion, the commerce ministry said at a briefing in Beijing today, after falling 22.5 percent in April.

China is relying on government-led spending under a 4 trillion yuan ($586 billion) stimulus plan to revive growth. Investment from abroad may increase when the global economy recovers from what the World Bank forecasts will be a contraction of almost 3 percent this year.

“Companies have just been trying to survive the crisis, I don’t think they’re in the mood for aggressive overseas expansion,” said Wang Qing, chief Asia economist for Morgan Stanley in Hong Kong. “It’s too soon to see a pick-up.”

For the first five months of the year, foreign direct investment declined 20.4 percent.

Premier Wen Jiabao cautioned during a tour of Hunan province on June 12 and 13 that the world economic outlook remains unclear, the government said in a statement on its Web site yesterday. China has yet to establish solid foundations for a recovery, he added.

The Chinese economy expanded 6.1 percent in the first quarter from a year earlier, the slowest pace in almost a decade. Full-year growth may be 7.5 percent, according to a Bloomberg News survey of economists last month.

Overcapacity, Unemployment

The nation’s economic problems include slumping exports, falling profits, industrial overcapacity, unemployment and potential budget shortfalls, the premier said. Positive signs include a bumper summer harvest, gains in retail sales, rebounding industrial output, improving market confidence and faster growth in urban fixed-asset investment, Wen said.

China “mustn’t underestimate” the difficulties and needs to prepare to tackle them over “a long-term,” the premier said.

Foreign-invested businesses account for 30 percent of industrial output, 55 percent of trade and 11 percent of urban jobs, according to the commerce ministry.

China will further relax and streamline procedures for investment from abroad, commerce ministry spokesman Yao Jian said at today’s briefing. The nation wants to create jobs and to attract money for high-technology industries, backward regions, and environmental protection, Yao said.

Tesco Plc , the biggest U.K. retailer, is among foreign companies still expanding in China, saying it will spend an average of 500 million yuan ($73 million) on each of four new shopping centers.


(Bloomberg)

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Monday, June 15, 2009


ISLAMABAD: Pakistan State Oil (PSO), the state owned fuel supplier, has conveyed to power generation companies that due to the current financial crunch owing to the accumulating circular debts it is unable to continue to tender for importing Low Supphar Furnace Oil (LSFO), official sources told Business Recorder. According to latest reports, PSO is owed Rs 80 billion by financially ill power generation companies.

PSO has been maintaining uninterrupted supply of LSFO to Kot Adu Power Company (Kapco) for the past several months. It was only after an exchange of correspondence and exchange of discussions, an amount of Rs 14 billion was transferred to the PSO directly in March 2009 for adjustment against Kapco outstanding dues of Rs 25 billion. Since then no payment has been received and with the continuity of supplies, the outstanding has accumulated to over Rs 20 billion (inclusive of the LSFO-HSFO price differential amount).

Consequently, PSO is unable to make payment to Attock Refineries Limited (ARL) as a result of which supply of local LSFO has been drastically reduced. Presently, the major portion of LSFO supplies is imported. Nonetheless PSO which is facing serious cash flow problems due to non payment by major fuel customers of the power sector totalling Rs 80 billion inclusive of Kapco, is not able to procure the product through imports.

"We apprehend that PSO will not be in a position to go for tendering process of LSFO cargos anymore. We have already conveyed this to WPPO with the request to arrange payment of the outstanding LSFO-HSFO price differential amount immediately," the sources quoted, PSO's top management informing the Petroleum Ministry. The sources said that PSO was of the view that it has taken this stand to save the utility from complete collapse/shut down as it is meeting 75 per cent POL requirements of the country.

"We asked Kapco to pay outstanding dues on most urgent basis enabling the company to make necessary arrangements for import of LSFO failing which we will not be in a position to import any further cargos," the sources quoted the General Manager, Consumer Business of PSO as writing in a letter a couple of days ago.

A couple of months ago, the government had floated Term Finance Certificates (TFCs) to clear a portion of the inter circular debt but the current status of outstanding amount of Rs 80 billion against public sector power generation companies and Kapco is again a source of serious concern. The government has earmarked Rs 30 billion in 2009-10 budget to pay interest on TFCs but this amount is clearly inadequate to deal with the issue of inter circular debt which indicates that the power crisis will intensify in the coming months.



(BRecorder)

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Monday, June 15, 2009

ISLAMABAD: The Advisor to Prime Minister on Finance, Shaukat Tarin, said on Sunday that in case of any delay in receipts of pledges from Friends of Democratic Pakistan (FODP) Pakistan has lined up commitment of $4 billion from the International Monetary Fund (IMF).

Addressing the post-budget news conference here, he said that FODP forum has been requested to give money for social sectors so that the growth-oriented policy could be pursued and implemented in true spirit through financial resources available with the country. He said that the World Bank, the Asian Development Bank, and Islamic Development Bank (IDB) would give $4.80 billion in the next two years. An assistance of $5.80 billion is expected from FODP forum in the same period.

"After achieving targets of economic stabilisation plan, the economy is poised to go for sustainable, equitable and job creating growth. The current account deficit and fiscal deficit are well under control.

The budget 2009-10 is focused on agriculture and manufacturing with agenda of enhancing productivity level through improvements to human capital base and physical infrastructure and ensure availability of cost effective energy in the country.

Shaukat said that during 2008-09 the response of this government was phasing out of the subsidies and sustaining the budgetary resources. He said that the expenditures were rationalised through a process of prioritisation of government development schemes to reduce budget deficit.

He said in this regard development expenditures were reduced and went down by Rs 120 billion. He added that SBP followed a tight monetary policy to reduce the aggregate demand and to bring down inflation. There were adjustments in petroleum prices and electricity prices to reduce burden on the budget, he added.

He said that net borrowing from SBP as of October was Rs 252 billion to Rs 258 billion. "By March it had been reduced to Rs 58 billion, which means we have started paying back to the SBP rather taking from it".

He said that import of non-essential items was curtailed by tariff adjustments to reduce the trade and current account deficits. He said that fiscal deficit has remained on target which means it has come down from 7.6 percent in 2007-08 to 4.3 percent in 2008-09. He said that current account deficit has been reduced from 8.5 percent to 5.3 percent of GDP, again a reduction of 3.2 percent in one year.

"Our tax and duty measures in Budget for Fiscal Year 2009-10 would revolve around providing protection to the poor and vulnerable against the current economic downturn by providing cash transfers and skill development, reviving manufacturing and industry, especially export-oriented industry, to raise their productive levels, broadening the tax base, instead of overburdening the existing taxpayers, and restraining unnecessary imports to improve the Balance of Payments position."

Tarin told a questioner that budgetary deficit will be around 3.4 percent during next fiscal year. Non-productive subsidies are being done away with this year, he said, adding that foreign exchange reserves stood at $11.30 billion while Gross Domestic Product valued Rs 14.82 trillion.

Responding to a query about entitlement of 15 percent ad hoc relief with regard to regular, contract and daily wage employees of the government and semi-government corporations, the Advisor said that all those who were getting their salaries from the national exchequer will be entitled to ad hoc relief. He said that levying carbon surcharge on POL products is a permanent feature and to help cut demand. "This will remain intact," he reiterated.

He said that the government would soon complete the National Finance Commission (NFC) Award within the next three months. This will help fair distribution of national resources between Centre and provinces. Tarin said that there was no jugglery of figures in the budget. "The Federal Budget 2009-10 is an open document. We have placed all our budget documents in the media cell of Ministry of Finance to maintain transparency," he added.

The government would pass on to the consumers impact in case oil prices increase along with rates of carbon surcharge on POL products. Although the government has imposed carbon surcharge on CNG, it would remain 35 percent cheaper than POL products and the aim of the government is to ensure use of gas resources wisely.

"Earlier, the CNG price was 58 percent of the POL products prices and now we have raised it from 58 percent of POL products prices to 65 percent of the POL products prices," he said.

The government would collect Rs 134 billion from carbon surcharge on POL products and carbon surcharge on CNG imposed in the budget 2009-10. Rs 122 billion would be collected from carbon surcharge on POL products and Rs 12 billion from carbon surcharge on CNG in next fiscal year 2009-10. Carbon surcharge on POL products will be Rs 8 per litre on high speed diesel oil (HSDO), Rs 10 per litre on motor spirit (petrol), Rs 6 per litre on kerosene oil, Rs 3 per litre on light diesel oil, and Rs 6 per kg on CNG.

He said that out of $1.5 billion Kerry Lugar Bill aid to be received from United States, $1 billion or Rs 80 billion would be spent in terrorism affected 25 percent districts of NWFP, Balochistan and Punjab during 2009-10.

He said NFC issue has been discussed in the special Cabinet meeting and Prime Minister would soon re-constitute Commission to hold detailed negotiations with provinces. Issue of arrears of Net Hydel Profits of NWFP against Wapda would also be discussed during NFC Award negotiations.

He said that power tariff increase would be made in case it was necessary, in gradual manner but not in one go. He hinted that the government would not pass on to the consumers the inefficiencies of public sector entities that are wasting Rs 150 to Rs 200 billion due to their inefficiencies. The government would reduce the line losses of distribution companies to keep the power tariff at reasonable level.

He clarified that Rs 19.4 billion that has been indicated income from privatisation in 2009-10 would mainly come from $700 million remaining PTCL privatisation proceeds that were held up due to the dispute over assets in provinces. He said that the issue has been resolved with the provinces and Etisalat will release to Pakistan the remaining privatisation proceeds soon.


(BRecorder)

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Monday, June 15, 2009

KARACHI: The Indian Tea Board plans to open an Indian tea promotion centre in Pakistan and Egypt with a view to increasing its market share in both the countries.

Sources said on Friday that India is striving hard to boost its tea exports in both prominent CTC tea consuming countries since the disintegration of the Soviet Union.

In the past, India’s largest chunk of tea production was imported by the Soviet Union. However, after losing this biggest market, Indian tea producers are looking for alternate markets such as Egypt, Pakistan and Iran besides UK.

The Pakistani consumers had declined the Indian CTC tea in the first place due to its poor quality. In order to cope with the situation, the delegations of Indian tea board and the Indian tea producers association have visited Pakistan twice lobbying among the tea packers, blenders and local importers.

The Pakistan tea association has however suggested to the Indian exporters to influence the tea packers as they could increase Indian tea component in their blended tea.

Courtesy: Finance.Kalpoint.Com

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Monday, June 15, 2009

VIENNA: The OPEC oil producers’ cartel said the worst of the impact from the economic crisis had passed for the oil markets, as it fractionally reduced its demand estimate for 2009 on Friday.

“In light of the considerable challenges the world economy and commodity markets, particularly the oil market faces, have undergone, the worst appears to be behind us,” the Organization of Petroleum Exporting Countries wrote in its latest monthly report.

“As the world economy stabilises, the world oil demand appears to be settling down,” it said. “Industrial production activities are steadying and in some parts of the world and have even improved slightly. This should stop the bleeding in oil demand. There are no significant downward revisions to our previous oil demand forecasts.”

OPEC estimated that demand would contract by 1.62 million barrels per day (bpd) or 1.89 per cent in 2009, only a marginal downward revision in demand from its earlier forecast.

In its previous monthly bulletin released in May, OPEC had been penciling in a contraction of 1.57 million bpd or 1.83 per cent for 2009. Nevertheless, uncertainties remained, OPEC cautioned.

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Monday, June 15, 2009

CAPE TOWN: Companies from the United States and the United Arab Emirates are interested in establishing large farms in Zambia to grow sugar and grains, the southern African country’s agriculture minister said on Friday.

Although a growing number of such land investments elsewhere have proved controversial, Agriculture Minister Brian Chituwo told Reuters Zambia had so much land available there would not be opposition.

He said a US company had offered to invest as much as $200 million in sugar cane production to make ethanol, involving small-scale farmers, but was waiting for proper policies to be put in place.

Chituwo added Zambia had 115,000 hectares of prime land suitable for sugar cane production.

He said a Dubai company was keen to grow rice or wheat.

“They are looking at 200,000 hectares, but we have 900,000 hectares of prime land available so the issue of land really should not be a problem. It is just a question of the mechanics of implementing this,” he told Reuters on the sidelines of the World Economic Forum on Africa in Cape Town. He said Zambia’s lack of exchange controls and the fact that it had lots of land available made it an ideal place for agricultural investment.

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